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March 26, 2012 (Chinavestor) The overbought monitor picked up the unusual shoot up of China BAK Battery (NASDAQ:CBAK) from last Friday. Should market sentiment remain strong, Mindray Medical (NYSE:MR), NetEase.,com Inc. (NASDAQ:NTES) and Shanda Games (NASDAQ:GAME) has more upside left. But China Automotive Systems (NASDAQ:CAAS) is trading way above its trading range and is in a more vulnerable position, according to the chart below.

Biadu.com Inc. (NASDAQ:BIDU) is above the $140 level and is not overbought. Other tech stocks may be able to ride on BIDU's back such as Qihoo 360 Technology (NYSE:QIHU).

Couple of large cap Chinese stocks are oversold. China Eastern Airlines (NYSE:CEA) is trading close to theoretical lows and is oversold. China's second largest carrier by traffic said 2011 profits fell to RMB4.89 billion from RMB5.38 billion a year ago. Slower passenger traffic growth and high kerosene prices are to blame. Still the stocks looks to be interesting for value investors.

Huaneng Power International (NYSE:HNP), another large cap Chinese listing on the NYSE, is just as oversold as CEA.

China Lodging Group (NASDAQ:HTHT) fell last week after reporting disappointing financials. The company is a much smaller player than CEA or HNP and thus is expected to stay oversold for some time.

Overbought A technical condition that occurs when prices are considered too high and susceptible to a decline. Overbought conditions can be classified by analyzing the chart pattern or with indicators such as the one above. A sharp advance from $15 to $30 in 2 weeks might lead a technician to believe that a security is overbought. Or, a security is sometimes considered overbought when the stock is trading out of its trading envelope and is approaching the theoretical high. It is important to keep in mind that overbought is not necessarily the same as being bearish. It merely infers that the stock has risen too far too fast and might be due for a pullback.

Oversold A technical condition that occurs when prices are considered too low and ripe for a rally. Oversold conditions can be classified by analyzing the chart pattern or with indicators such as the one above. A sharp decline from $30 to $15 in 2 weeks might lead a technician to believe that a security is oversold. Or, a security is sometimes considered oversold when the stock is trading below its trading envelope and is approaching theoretical lows. It is important to keep in mind that oversold is not necessarily the same as being bullish. It merely infers that the security has fallen too far too fast and may be due for a reaction rally.

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